Relaxo Footwears demonstrated healthy growth in recent years
18-05-2015 • About Relaxo Footwears (
$RELAXO) • By InTwits
Relaxo Footwears is a growth stock in Footwear industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Relaxo Footwears showed fast growth in the last financial year. The company's revenue surged on 22.2% in FY2015. At the same time Relaxo Footwears well managed its profitability and showed even faster growth in EBITDA of 35.8% for the same period.
In the longer period Relaxo Footwears showed fast revenue growth of 19.6% from FY2012 to FY2015 annually. EBITDA surged on 27.6% from FY2012 to FY2015 annually.
Relaxo Footwears ($RELAXO) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 6,916 | 8,647 | 10,098 | 12,123 | 14,808 |
|---|
| Revenue growth, % | | 25.0% | 16.8% | 20.0% | 22.2% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 723 | 968 | 1,098 | 1,478 | 2,008 |
|---|
| EBITDA growth, % | | 33.8% | 13.5% | 34.6% | 35.8% |
|---|
| EBITDA margin, % | 10.5% | 11.2% | 10.9% | 12.2% | 13.6% |
|---|
| Net Income | 268 | 418 | 448 | 656 | 1,031 |
|---|
| Net Income margin, % | 3.87% | 4.84% | 4.44% | 5.41% | 6.96% |
|---|
| |
| CAPEX | 627 | 488 | 838 | 711 | 1,313 |
|---|
| CAPEX/Revenue, % | 9.06% | 5.65% | 8.30% | 5.87% | 8.87% |
|---|
| Debt | 1,565 | 1,752 | 2,254 | 1,984 | 2,394 |
|---|
| Cash | 11 | 7 | 17 | 56 | 44 |
|---|
| Net Debt/EBITDA | 2.1x | 1.8x | 2.0x | 1.3x | 1.2x |
|---|
| |
| ROIC, % | 17.4% | 21.2% | 19.9% | 24.1% | 28.3% |
|---|
| ROE, % | 21.9% | 27.3% | 23.2% | 26.7% | 32.0% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. EBITDA margin surged on 1.40 pp from 12.2% to 13.6% in FY2015. If we look for the longer period EBITDA margin surged on 2.40 pp from 11.2% in FY2012 to 13.6% in FY2015.
We call Relaxo Footwears an attractive growth stock as together with the growth it delivers high ROIC at 28.3%. Three years ago it was lower at 21.2%. It's average level of ROIC for the last three years was 24.1%.
Relaxo Footwears's Net Income margin surged on 1.60 pp from 5.40% to 7% in FY2015. If we look for the longer period Relaxo Footwears's Net Income margin surged on 2.20 pp from 4.80% in FY2012 to 7% in FY2015.
Relaxo Footwears operates at ROE of 32.0%. It's average level of ROE for the last three years was 27.3%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.The company's CAPEX/Revenue was 8.87% in FY2015. Relaxo Footwears's CAPEX/Revenue surged on 3.22 pp from 5.65% in FY2012 to 8.87% in FY2015. It's average CAPEX/Revenue for the last three years was 7.68%.
Leverage (Debt)
Having such a fast growth profile Relaxo Footwears keeps medium debt level at 1.2x Net Debt/EBITDA. In the longer period the company showed big decline in leverage of 0.63x from 1.80x in FY2012 to 1.17x in FY2015.
Valuation vs. comparable companies
The market closed today at 25.2x EV/EBITDA for Relaxo Footwears which is 80.9% higher than 13.9x Footwear peer group avearge calculated on the basis of 14 companies. The market closed today at 46.8x P/E for Relaxo Footwears which is 53.1% higher than 30.6x Footwear peer group avearge calculated on the basis of 2 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 72.7x EV/(EBITDA-CAPEX) which is not surprisingly 2,310% higher than 3.0x Footwear industry avearge calculated based on 2 companies.
Peers in Footwear
Below we provide Relaxo Footwears benchmarking against other companies in Footwear industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | -50.6% | 18.1% | 9.8% | 28.1% | |
| |
|---|
| Median (1 company) | -50.6% | 18.1% | 9.8% | 28.1% | |
|---|
| Relaxo Footwears ($RELAXO) | | 25.0% | 16.8% | 20.0% | 22.2% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 9.4% | 10.8% | 10.0% | 11.7% | |
| |
|---|
| Median (1 company) | 9.4% | 10.8% | 10.0% | 11.7% | |
|---|
| Relaxo Footwears ($RELAXO) | 10.5% | 11.2% | 10.9% | 12.2% | 13.6% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 5.3% | 5.4% | 4.5% | 2.4% | |
| |
|---|
| Median (1 company) | 5.3% | 5.4% | 4.5% | 2.4% | |
|---|
| Relaxo Footwears ($RELAXO) | 9.1% | 5.6% | 8.3% | 5.9% | 8.9% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 13.4% | 16.7% | 14.1% | 19.2% | |
| Sreeleathers ($SREEL2) | | | | 5.7% | |
| Nb Footwear ($NBFOOT) | -23.3% | | | | |
| |
|---|
| Median (3 companies) | -5.0% | 16.7% | 14.1% | 12.5% | |
|---|
| Relaxo Footwears ($RELAXO) | 17.4% | 21.2% | 19.9% | 24.1% | 28.3% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Superhouse ($SUPERHOUSE) | 2.6x | 2.1x | 2.7x | 2.0x | |
| Sreeleathers ($SREEL2) | | | -0.1x | -0.5x | |
| |
|---|
| Median (2 companies) | 2.6x | 2.1x | 1.3x | 0.8x | |
|---|
| Relaxo Footwears ($RELAXO) | 2.1x | 1.8x | 2.0x | 1.3x | 1.2x |
